Open statement on steps to democratize the World Bank and IMFPlease endorse this statement - see instructions at end - and also circulate it to your colleagues and contacts. Following the Monterrey conference on Financing for Development a number of official discussions are underway about changing the governance regime of international institutions. Civil society organisations and others have long pointed out that the World Bank and IMF wield enormous power over developing country governments, yet have severe shortcomings in their legitimacy and effectiveness. The undersigned organisations and individuals hereby put on record a statement of some of the key problems with World Bank and IMF governance and their demands for minimum steps to improve it. 1) rebalancing board composition and voting powerThe Executive Boards of the World Bank and IMF do not give all countries an equal opportunity to represent themselves. Seats and votes are allocated to countries according to their economic size or historical significance. The 46 Sub-Saharan African countries have just 2 Executive Directors on the Bank and Fund Boards to represent them all, while 8 countries have a single Executive Director each. Rich country Executive Directors currently control over 60 per cent of the votes at the World Bank and IMF. The US government has a veto on decisions requiring a super-majority. The dominance of the richer countries remains the case despite the increasing levels of income to the Bank and Fund from borrowing country loan repayments. We demand that: a. There be a reallocation of Board seats and votes to ensure that all member countries are fairly able to represent themselves and that creditor and borrower countries have an equal allocation of votes; b. There be no more than 10 countries per constituency, and rotation of Board members among different countries in the constituency; c. No one country should have a veto on any decisions. 2) making governing bodies transparentThe World Bank and IMF have made progress in recent years in the transparency of some of their documentation. This has not, however, extended to the Boards of the institutions. We believe that, as these institutions make decisions which affect the welfare of people across the world, citizens have a right to know what positions their representatives are taking within their governing structures. We demand that: a. The agenda, transcripts, summaries and minutes of World Bank and IMF Board meetings be published so that parliamentarians, civil society groups, academics and others can see who is taking what positions at these important institutions. Exceptions to this principle should be narrowly drawn and based on a clear indication of harm that would result from disclosure of specific information. b. Board members should express their position with formal votes rather than informal indications of position. 3) opening leadership selectionThe leaders of the World Bank and IMF play an important role in defining the directions of their institutions, chairing their boards and representing them publicly. They are currently selected in an non-transparent process which limits applications on the grounds of nationality. The European countries nominate the IMF Managing Director while the USA nominates the World Bank President and the IMF Deputy Director. This is unacceptable. The minor steps agreed recently to improve the selection processes have not gone nearly far enough. We demand: a. the introduction of a transparent process for selecting the heads of both organizations. This should involve all member countries and significant stakeholder groupings and assess candidates on merit, regardless of their nationality. In fact geographical diversity in top positions should be actively encouraged. 4) reversing mission creepThe World Bank and the IMF have taken on so many roles that they have branched out to cover areas and issues way beyond their mandate and competence. By encroaching on the mandates of other multilateral institutions. By doing so they have increasingly deprived UN specialized agencies and bodies with expertise in particular fields of the freedom to propose effective policies. Indirectly this has also undermined the participation of developing countries in global policy-making and agenda-setting. We demand: a. the renegotiation of the Relationship Agreements between the IMF, World Bank and the UN to clarify the responsibilities of the IMF and World Bank to the UN, and enhance the ability of the UN to ensure that international financial institutions fully respect the jurisdiction of other agencies, funds and bodies. Signatories1. Andrea Cornwall Institute of Development Studies - University
of Sussex UK Sign-up instructions and further informationSend your name, organisation (if any) and country to: ifigov@brettonwoodsproject.org The statement is also available in French Please send your endorsements by 10 April 2003 if possible, though supplementary endorsements will be accepted after this date. Please state if you would NOT like to be added to an email list for occasional announcements on IFI governance (max. 6 per year). See also: Window of opportunity on IFI Governance, (Bretton Woods Update 32), plus further links. Increasing clarity on limitations of IFI governance debate (Bretton Woods Project, 10 Mar 03) This text may be freely used providing the source is credited. This page is: <http://brettonwoodsproject.org/art.shtml?x=16202> Published: 1 April 2003 , last edited: 8 February 2005 Viewings since posted: 5531 |
Articles: 2266 The Bretton Woods Project has a vacancy for a policy officer to work on a number of environment and development policy issues. Please see the full role profile and application instructions. Newswire |
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